“At today’s meeting, Mr Pym and I agreed that it is in AIB’s best interest that the process to recruit a new chief executive would begin without delay with a view to having someone with the calibre, skills and drive to lead AIB in place as soon as possible.

“The chairman informed me that this task has already commenced and that AIB will be working with a recruitment firm to assist with the board’s assessment and selection process.

“Mr Pym has also agreed to keep me updated as the selection process develops with a view to being in a position to recommend a new chief executive to me within the coming months.”

The Department of Finance hired Goldman Sachs to act as an advisor on the part-privatisation of AIB.

It is believed that the bank will look to refinance €1.6bn of contingent convertible (CoCo) notes this year through the issuance of additional tier-one capital and subordinated debt.

Moreover, analysts expect AIB to redeem up to half of the Government’s €3.6bn of preference shares with the remainder converted into common equity.

The Government is expected to float at least 25% of the bank either later this year or 2016.

Paddy Power quoted former RBS banker and current CEO of Bank of Cyprus, John Hourican and Richard Pym as early favourites to succeed Mr Duffy. Industry sources say that most likely an external candidate will be appointed to the role.